China’s two state shipping giants have combined their container-shipping assets among other restructuring efforts, as part of a multi billion-dollar merger to strengthen the nation’s competitiveness in an industry battered by weak demand and persistent overcapacity.

China’s State Cabinet on Friday approved the merger between China Ocean Shipping (Group) Co., or Cosco Group, and China Shipping (Group) Co., according to statement posted on the website of China’s state-owned Assets Supervision and Administration Commission, ending years of speculation among analysts that the government would ultimately combine the two groups to boost efficiency.

China Cosco Holdings Co. said in an exchange filling that it plans to consolidate the container-shipping operations with its state-backed rival China Shipping Container Lines Co. through acquiring a total of 33 container-shipping related units and affiliates from CSCL for 1.14 billion yuan ($177 million) and leasing its container ships.

Meanwhile, the Hong Kong and Shanghai-listed flagship of Cosco Group plans to sell all its dry-bulk shipping businesses to its state parent for 6.77 billion yuan.

The asset restructuring also covers the two groups’ ports and oil-tanker-shipping operations. Cosco Pacific Ltd., the Hong Kong-listed port-operating arm of Cosco Group will pay 7.63 billion yuan to buy the port-operating business of China Shipping (Group) Co. Cosco Pacific also plans to sell its container leasing business—Florens Container Holdings Ltd.—to a unit of China Shipping Container Lines Co. for 7.78 billion yuan.

China Shipping Development Co., the oil-and-bulk-shipping unit of China Shipping Group, also plans to buy the oil shipping business from China Cosco Group, it said.